Before deciding to shift IT operations onto the cloud, it’s important for CEOs, CIOs, and other key decision makers to understand exactly how cloud computing can advance their organizations. Cloud computing provides a means not only to reduce costs but also to increase the efficiency and value of IT functions. Identifying all of the advantages of cloud computing — and then tying those advantages to a strategic IT plan designed to make utmost use of them — allows enterprises to achieve the full benefit of the technology.
Lower Capital Costs
Capital cost-saving is the most obvious reason why enterprises consider switching to a cloud model. Investment in equipment (e.g., servers, networking equipment, software) can be reduced, while IT efficiency, capacity, and reliability actually improve. And increases in processing requirements dont involve corresponding surges in capital costs.
“Core to the value of cloud computing is the ability to operate IT with fewer dollars. While weve looked for solutions to this dilemma for years, the reality is that most enterprises have increased IT operations spending without a proportional increase in value,” concludes David Linthicum, the founder and CTO of Blue Mountain Labs, in his “Creating and Implementing an Enterprise Cloud Strategy.”
Decreased Energy and Housing Expense
Traditional internal IT infrastructures are notoriously wasteful in their energy use because of their inefficient use of servers. A typical enterprise uses only 10% of its server capacity because, in the traditional model, a physical server is dedicated to a single application. This “silo” approach results in a vast amount of unnecessary electricity use, as well as the cost of housing the “server sprawl.” Cloud computing enables an enterprise to more efficiently utilize its servers, thereby reducing the physical space and electrical use required.
Greater Flexibility
With cloud computing, you can upsize or downsize your IT infrastructure on demand. Through virtualization technology, IT resources can be dynamically allocated or de-allocated based on immediate need, enabling them to always stay in alignment with strategic direction. When additional computing or storage resources are required, there is no delay waiting for hardware/software procurement or server allocation. Conversely, if fewer resources are needed, there are no capital costs associated with downsizing.
This elasticity of IT resources provides an enterprise with highly valuable agility in the marketplace. Sudden growth or the introduction of a new product can be accommodated, while the negative impact of a market downturn can be lessened. This agility is especially appealing to companies with routinely fluctuating IT demands (i.e., seasonal retailers).
More Time to Focus on Strategy
“Today CIOs are more concerned about keeping the existing IT infrastructure in an operational state, and not about working on new projects that can bring more value to the business,” Linthicum observes.
Cloud computing addresses this problem by freeing up CIOs, senior operations managers, and other critical IT personnel to turn their attention to high-value strategic initiatives that are correlated with cloud computing’s capabilities. This freedom to focus on strategy — rather than simply keeping IT operational — can pay great long-term benefits by facilitating improved planning and execution.
Takeaway Point
A move to cloud computing is a fundamental switch in IT strategy that should not be entered into without a well-defined plan for how to best align the considerable benefits of cloud computing with IT objectives and an enterprise’s overall goals.
